Because of a security error, the client could not connect to the Terminal Server

Symptoms

After you upgrade a Microsoft Windows NT domain to Microsoft Windows 2000 or Microsoft Windows Server 2003, Windows 2000 Terminal Services clients may be repeatedly denied access to the terminal server. If you are using a Terminal Services client to log on to the terminal server, you may receive one of the following error messages:

Because of a security error, the client could not connect to the Terminal server. After making sure that you are logged on to the network, try connecting to the server again.

-or-

Remote desktop disconnected. Because of a security error, the client could not connect to the remote computer. Verify that you are logged onto the network and then try connecting again.

Additionally, the following event ID messages may be logged in Event Viewer on the terminal server:

Event ID: 1008 Event Source: TermService Event Description: The terminal services licensing grace period has expired and the service has not registered with a license server. A terminal services license server is required for continuous operation. A terminal server can operate without a license server for 90 days after initial start up.

Event ID: 1010 Event Source: TermService Event Description: The terminal services could not locate a license server. Confirm that all license servers on the network are registered in WINS\DNS, accepting network requests, and the Terminal Services Licensing Service is running.

-and-

Event ID: 28 Event Source: TermServLicensing Event Description: Terminal Services Licensing can only be run on Domain Controllers or Server in a Workgroup. See Terminal Server Licensing help topic for more information.

Cause

This issue may occur if a certificate on the terminal server is corrupted.

Resolution

Important This section, method, or task contains steps that tell you how to modify the registry. However, serious problems might occur if you modify the registry incorrectly. Therefore, make sure that you follow these steps carefully. For added protection, back up the registry before you modify it. Then, you can restore the registry if a problem occurs. For more information about how to back up and restore the registry, click the following article number to view the article in the Microsoft Knowledge Base: